Insurance Company Pay Out Problems
Three years after Hurricane Katrina ravaged the Gulf Coast, reports still swirl about homeowners across the region with viable claims for destroyed homes battling denied insurance payments based on fraudulent tactics of delay, deny and dispute. Yes, we all watch the reports with a sense of irritated, albeit comfortable detachment that comes from living miles away from such a legal nightmare.
What most consumers don’t realize is that delay, deny and dispute has become an “industry standard” waiting to strike any victim of a bodily injury or property damage anytime, anywhere, including here in our state of Illinois. Attorneys at Horwitz, Horwitz & Associates, Ltd. fight it every day on behalf of our clients; a fight that would not be necessary if valid, supported claims were paid as promised when our clients took out their policies.
For the innocent victim of an auto accident with even modest medical bills of $10,000 or less, insurance companies are betting that such tactics will continue to prevail and add to their fortune.
By delaying payment of your medical bills, they’re rolling the corporate dice and betting that you’ll succumb to one of several defeats: a) give up and go away quietly, b) hesitate to obtain an attorney because you’ll assume (wrongly) that it will cost you a great deal of money, and c) if all else fails, you’ll settle over time out of financial hardship for an amount less than your total medical expenses, and far less than your policy provides for. Meanwhile, they’ll continue to accumulate record annual revenue by not paying your (valid) claims, and can easily afford to wait you out…for years if necessary.
As more and more consumers are fighting back, the insurance industry has simply changed the public argument…it’s the greedy trial lawyers who are at fault, they say, forcing frivolous lawsuits into the court system and driving up the cost of insurance for consumers as a result. The industry insists that their policies are simply in place to ensure that they are only paying valid claims, and that individual claim investigation takes time. How much time exactly, is what state insurance commissioners want to know and limit.
Response From States and Insurance Companies
The state of Washington’s insurance commissioner and lawmakers fought back, passing new legislation that would force insurance companies to pay valid claims within a reasonable time period. The new law states that if an injured party was forced into the courts for delay of payment and the insurance company lost, the carrier would be liable for 3X’s the original claim and attorney fees. It’s simple, according to the insurance commissioner…pay your legitimate claims on time and there’s no legal action or additional penalties and damages. Only those companies who follow the “delay, deny and dispute” policy to defraud a consumer need be concerned about a loss and penalties — in short, the cost of accountability.
But the insurance companies waged (typical) war with State Farm, Farmers, Allstate and others spending $11.5 Million to put a referendum on the ballot last November to have voters overturn the new law out of a threat (a lie) that it was unfair and would cause an increase in premiums.
Deceptive television commercials blanketed the state depicting greedy trial lawyers salivating over how they can rake in the revenue by suing insurance companies, once again deceiving the public into believing that they, the insurance companies, are the innocent victims and that trial lawyers are responsible for the rise in insurance rates due to frivolous suits. They omitted the fact that attorneys often become involved only after months, and sometimes years of pleading with an insurance company to honor an injured party’s claim.
Compare the $11.5 Million spent by the insurance industry in Washington State to the trial attorney association’s limited capabilities — $886,000 raised to fight the ballot measure. The public, who stood to benefit through the efforts of the attorneys if they should fall prey to the schemes and policies of the insurance industry, might have yet again bought into the false finger pointing and voted against their best interests, overturning the efforts of lawmakers to protect them from being ripped off. It wouldn’t be the first time. The same argument was successfully spoon-fed to the Illinois public regarding Medical Malpractice Tort Reform two years ago.
Truth About Trial Lawyers
The insurance industry was banking on decades of public disinformation; propaganda that trial lawyers are a well financed machine of special interest, when in fact, nothing could be farther from the truth. Unlike corporate law firms representing large companies who are paid by the hour with unlimited expense accounts for experts and other costs to drag cases out for years, trial attorneys invest their own money to prosecute cases on behalf of their clients – their clients pay nothing up front. Trial attorneys only receive a fee (in cases of personal injury) if, and when, a case is won and a recovery is paid.
Filing a frivolous personal injury lawsuit is like flushing, in some cases, as much as $600,000 of an attorney’s own money down the toilet because if they lose, the client pays nothing. When insurance companies lose and appeal a decision, the additional legal expense compounds the original costs of the trial, requiring an even higher investment by the attorney who seeks justice for you, the client.
In the end, Washington voters did not blindly accept the lies and R-67 was passed 57-43, holding the insurance industry accountable. Residents of Illinois can only hope to someday have lawmakers with such character and sense of “duty” to their constituents as those found in Washington State.
Managing Partner and Lead Trial Attorney, Cliff Horwitz, welcomes your comments on this article and can be reached at (800)-985-1819.